Large banks are crafting their strategy to get regulators to back off from tough talk that they may force the riskiest firms to hold twice as much capital as smaller banks.
The bankers' new offensive comes ahead of several meetings of international regulators set up over the next few weeks with the hope of having a "capital buffer" proposal in July, according to a person familiar with the talks.
The regulators are deciding how much extra capital the biggest firms, whose failure would do the most damage to financial markets and the economy, will have to hold above the agreed-upon Basel III framework calling for a minimum of 7 percent capital.
Big banks have been bracing for a buffer that could add as much as 3 percentage points, for a total of 10 percent.
Federal Reserve Governor Dan Tarullo raised the ante last week when he said the Fed is considering an option where the largest banks may have to hold between 8 percent to 14 percent in total capital.
That shocked the banks and sent them scrambling for a way to fight back.
"It certainly got our attention," said one industry lobbyist.
Banks will be launching a multi-prong attack to exploit the range of capital hawk and dove regulators, and to convince lawmakers that it's a bad thing for America to have banks sitting idly on capital.
"The regulators do listen to what folks do on Capitol Hill," said Wayne Abernathy, a top official at the American Bankers Association. "They are accountable to the people's representatives."
The industry faces two significant obstacles.
